SEC Adopts Amendments To Modernize Risk Factor Disclosure Requirements

On August 26, 2020,¹ the Securities and Exchange Commission (the "SEC") announced the adoption of amendments to modernize the description of business, legal proceedings, and risk factor disclosures that registrants are required to make pursuant to Regulation S-K. For purposes of SEC-registered securitizations, the most significant changes are:

• to discourage lengthy risk factor disclosures (especially generic risk factors that could apply to any issuer or any offering) that do not concisely address the material risks of the specific offered security;
• to require that risk factors be organized under appropriate headings and sub-captions; and
• to require a summary (no more than 2 pages) of risk factors in the forepart of the prospectus if the risk factor section exceeds 15 pages.